PHX Minerals Acquires Net Royalty Acres in the Oklahoma's Southern SCOOP Play
NYSE-listed PHX Minerals Inc. has entered into an agreement with certain undisclosed third parties to acquire approximately 2,698 net royalty acres in the Southern SCOOP play in Oklahoma, for a total consideration of approximately US$11.9 million payable in cash and stock, subject to customary closing adjustments. The transaction was unanimously approved by PHX’s board of directors.
Under the terms of the agreement, the total consideration consists of an initial cash consideration of approximately US$9.5 million, and an additional consideration of US$2.4 million payable by way of issuance of common shares of PHX. The company has commenced an underwritten public offering of 5.5 million shares at a price of US$2.0 per share to fund the cash consideration of the acquisition, as well as for general corporate purposes.
The assets acquired include approximately 2,698 net royalty acres in the SpringBoard III area of the Southern SCOOP play area located in the Stephens, Carter, and Garvin Counties of Oklahoma. The interests include 103 PDP gross wells, 17 gross wells in progress, and an estimated 613 gross undrilled locations. Key operators in the area include Continental Resources Inc., Marathon Oil Corp., Ovinitiv Inc., and Camino Natural Resources LLC. The acreage has a current net production of 0.529 million cubic feet equivalent per day (MMcfe/d), and estimated reserves of 20.3 billion cubic feet equivalent (Bcfe)
“This is an exceptional acquisition of mineral assets with excellent geology that fits well within our stated strategy to grow the company on an accretive basis. These assets have compelling upside potential in a core area with active drilling programs by high quality and capitalised operators,” commented Chad Stephens, PHX’s President & CEO.
Based in Oklahoma, PHX Minerals holds interests in mineral acreage and producing oil & gas properties located across Oklahoma, North Dakota, Texas, New Mexico, and Arkansas.
The transaction is subject to customary closing conditions, and is expected to be completed in late April 2021, with an effective date of November 1st, 2020.